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  • Interpretation
  • No.287
  • Date
  • 1991/12/13
  • Issue
    • What is the effect of a later inconsistent interpretation of an administrative action based on a prior interpretation and executed before the release of the later interpretation?
  • Holding
    •        Generally, interpretation of administrative statutes by an administrative governing agency is to elucidate the original legislative intent of the administrative statutes. Hence, the interpretation shall be applicable from the respective effective date of the relevant statutes. However, in the situation where there is an inconsistency between a prior and later interpretation, any administrative actions executed based on the prior interpretation before the release of the later interpretation shall be allowed to stand unaffected by the later interpretation if the prior interpretation is not contrary to law and not obviously wrong. This is to maintain the stability of the legal order. Directive T.T.S.T. No. 7530447 dated March 21, 1984, of the Ministry of Finance, which states: “No alteration shall be made to cases of business entities that had their payment of for-profit-business income tax determined before the announcement of this decree. Those business entities whose cases have not been determined, or have been determined but with unsettled or uncollected payment shall make good without penalty the shortfall in tax in accordance with this decision” adheres to the above stated principle and hence is consistent with the Constitution. 
      
  • Reasoning
    •        Administrative governing agencies derive their authority from law. Hence, an interpretation of an administrative statute is to elucidate the original legislative intent of such statute. It is not an independent administrative decree by nature and thus shall be applicable from the respective effective date of the relevant statutes. However, in the situation where there is an inconsistency between a prior and later interpretation and where the prior interpretation is not obviously wrong, any administrative actions executed based on the prior interpretation before the release of the later interpretation and which had been determined through administrative proceedings shall only be subject to rehearing based on statutory rehearing causes. For cases determined other than by administrative proceedings, subject to the exceptions of the prior interpretation being contrary to law, thus injuring the right and interest of the people and which must be altered by the governing agency, the later interpretation shall have no effect on maintaining the stability of the legal order. Directive T.T.S.T. No. 7530447 dated March 21, 1984, of the Ministry of Finance, which states: “No alteration shall be made to cases of business entities that had their payment of for-profit-business income tax determined before the announcement of this decision; those business entities whose cases have not been determined, or have been determined but with unsettled or uncollected payment shall make good without penalty the shortfall in tax in accordance this decision” adheres to the above stated principle and hence is consistent with the Constitution. Similarly, Article 28 of the Tax Levy Act states that taxpayers who had overpaid tax due to either erroneous application of statutes or errors in calculation can apply for a refund within the 5-year statutory limitation period. Hence, if the interpretation of the administrative statute which the taxation decree was based on was indeed contrary to the law, those taxpayers who have paid the tax can apply for a refund in accordance with this statute.  However, if there was no erroneous application of statutes at the time the tax collecting agency executed the relevant taxation decrees, those taxation decrees which had been determined shall not be affected by any subsequent changes in the statute or its interpretation. The said statute naturally has no application in this later scenario. Directive T.T.S.T. No. 32552 is not an applicable law or decree with respect to this present final award determination. As the applicant had paid the tax and had not applied for administrative remedy, the Administrative Court is unable to determine the application of that decision. Hence, it is not covered by this present interpretation. 
      
    • *Translated by Professor Wen-Yeu Wang.
      
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